Joint ventures announced for retail trade and other measures
On Monday, Cuban officials announced the authorization of the operation of joint ventures with foreign capital in retail trade, and in the wholesale market internally. Cuban first deputy minister of Foreign Trade and Foreign Investment (MINCEX), Ana Teresita González Fraga, presented a package of measures that are the responsibility of her ministry on national TV.
She explained that the government will allow foreign partners to operate and supply hundreds of Cuban stores. These foreign investors will be allowed to operate as private companies for the wholesale market and will be able to pre-finance domestic producers, so that domestic producers can also become domestic suppliers.
Progreso Weekly summarizes what was stated by the deputy minister:
- Promote the creation of foreign investment entities to market in the wholesale market. This measure had not been applied before.
- Promote the creation of joint ventures under the foreign investment law to carry out retail activities. It will be done selectively.
- Said businesses will be destined mainly to the sale of raw materials, supplies, equipment and other goods that contribute to the development of national production.
- “What is sought is to pre-finance these national producers so that, in time, they deliver the finished goods to the foreign investment modalities, and these, in turn, market them in the national market to contribute to a greater supply in the national market (…) since today we have installed capacities in the country that, due to lack of financing, cannot produce goods.”
- The foreign investment modalities themselves will have a differentiated financial scheme and will be able to market their products wholesale. “This scheme must include the authorization to make sales in MLC,” she pointed out.
The deputy minister pointed out that what was announced will be accompanied by control mechanisms.
Before concluding, she emphatically affirmed that the state will maintain the monopoly on foreign trade. However, selectively, under the supervision of Mincex, they will allow some companies to carry out import and export operations. For this, the relations that these centers have maintained with the country will be considered.
The new measures announced Monday follow 75 new measures announced in July aimed at supporting Cuba’s economic recovery, including resuming an official exchange market for the dollar and allowing foreign investment in Cuba’s private sector. Both sets of measures focus on attracting foreign investment and currency as a way of alleviating food, goods, and medicine shortages given high global market prices and Cuba’s dependence on imports, lack of domestic food production, and lack of access to cash.